On the equivalence of tariffs and quotas under incomplete information

We evaluate the possibilities of the equivalence between tariffs and quotas under incomplete information of foreign technologies. We propose two possible criteria, the expected output and the expected price, for the government to set its quota permits. By using these criteria, we address the equivalence in domestic production. We show that equivalence in domestic quantity will depend on the curvature of demand function as well as on the likelihood of non-binding quotas.